UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)

|X|  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
     1934.
                           For the fiscal year ended December 31, 2006

|_|  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

          For the transition period from ____________ to _____________.

                        Commission File Number: 000-50294

                                 LIFE USA, INC.
                                ----------------
             (Exact name of registrant as specified in its charter)

                               Colorado 84-1426725
                  --------------------- -----------------------
                 (State of incorporation) IRS Employer ID Number

                  2300 Canyon Blvd. Suite 4, Boulder, CO 80302
                  --------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                 303 - 415 1900
                                 --------------
                         (Registrant's Telephone number)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

         Class                         Name of each exchange on which registered
--------------------------------------------------------------------------------
  Common Stock,    $0.0001 Par Value                          None


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days: [X] Yes [__] No

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements incorporated by reference in Part III of this Form 10-KSB [ X ]

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Act). __ Yes X No

State issuer's  revenues for its most recent fiscal year: $0

As of the close of  trading on April 10,  2007,  there  were  10,060,534  common
shares  were  issued  and  outstanding,  6,185,867  shares of which were held by
non-affiliates.  The  aggregate  market  value  of the  common  shares  held  by
non-affiliates,  based on the price at which the common equity was sold on March
21, 2007, 2007, was approximately $494,709.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

Transitional Small Business Disclosure Format (check one):  YES  [  ]   NO [ X ]



<PAGE>




                                TABLE OF CONTENTS

PART I                                                                      PAGE

   Item 1.  Description of Business                                         1
   Item 2.  Description of Property                                         3
   Item 3.  Legal Proceedings                                               3
   Item 4.  Submission of Matters to a Vote of Security Holders             4

PART II

   Item 5.  Market for Common Equity and Related Stockholder Matters        4
   Item 6.  Management's Discussion and Analysis or Plan of Operation       6
   Item 7.  Financial Statements                                            7
   Item 8.  Changes in and Disagreements With Accountants on Accounting     9
            and Financial Disclosure
   Item 8a. Controls and Procedures                                         10
   Item 8A (T).  Controls and Procedures
   Item 8b. Other Information                                               10

PART III

   Item 9.  Directors, Executive Officers, Promoters and Control Persons;
            Compliance with Section 16(a) of the Exchange Act              11
   Item 10. Executive Compensation                                         13
   Item 11. Security Ownership of Certain Beneficial Owners and Management 16
   Item 12. Certain Relationships and Related Transactions                 17
   Item 13. Exhibits and Reports on Form 8-K                               18
   Item 14. Principal Accountant Fees and Services                         18

SIGNATURES                                                                 19

This annual report  contains  forward-looking  statements  within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities  Exchange Act of 1934, as amended.  These statements relate to future
events or our future  financial  performance.  In some cases,  you can  identify
forward-looking  statements  by  terminology  such as "may,"  "will,"  "should,"
"expects,"  "plans,"   "anticipates,"   "believes,"   "estimates,"   "predicts,"
"potential,"  or "continue," or the negative of these terms or other  comparable
terminology.  These  statements are only  predictions  and may involve known and
unknown  risks,  uncertainties  and other  factors,  including  the risks in the
section  entitled "Risk  Factors,"  that may cause our or our industry's  actual
results,  level  of  activity,  performance  or  achievements  to be  materially
different  from  any  future  results,   levels  of  activity,   performance  or
achievements expressed or implied by these forward-looking statements.

Although  we believe  that the  expectations  reflected  in the  forward-looking
statements  are  reasonable,  we  cannot  guarantee  future  results,  levels of
activity,  performance or  achievements.  Except as required by applicable  law,
including the securities  laws of the United States,  we do not intend to update
any of the  forward-looking  statements  to conform  these  statements to actual
results.




<PAGE>





                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS.
--------------------------------

Company History

Life USA,  Inc.  (the  "Company")  was  originally  incorporated  in Colorado in
January,  1997. The original name of the Company was Lifeline USA, Inc. Articles
of  Amendment to the  Articles of  Incorporation  were filed on January 16, 1997
changing  the  Company  name  to Life  USA,  Inc.  To  solve  an  administrative
dissolution  it  reincorporated  in 2002. An  administrative  dissolution  is an
action  taken by the  Secretary  of State to cancel it as a  corporation  due to
failure to file an annual report and pay an annual fee. The Company shareholders
approved  the  incorporation  of Life  USA,  Inc.  again in  2001,  and then the
directors  acting as trustees  entered into a merger of the  original  Life USA,
Inc. with the reincorporated  Life USA, Inc. The Company was organized to engage
in any  activity  or  business  not in  conflict  with the laws of the  State of
Colorado or of the United States of America.

In 2001 the Company  entered into a Share  Exchange  Agreement with World Health
Management,  Inc.  shareholders  ("World Health") in which the Company exchanged
58,384 shares to  shareholders  of World Health for the control of World Health,
which was liquidated.

In September 2005, the Company and Neuro  Nutrition,  Inc.  ("Neuro")  signed an
agreement whereby, the Company acquired all of the issued and outstanding shares
of Neuro in exchange for 8,300,000 shares of the Company's  common stock.  Neuro
became a wholly owned subsidiary of the Company.

Neuro was  incorporated on July 23, 2004, as 4 Your Life Nutrition Inc. ("4 Your
Life  Nutrition"),  in the state of  Colorado,  and has been in the  development
stage since. 4 Your Life Nutrition did not have any  operational  activity until
January 2005. On January 6, 2005,  the name was changed to Neuro  Nutrition Inc.
It was primarily organized for the purpose of distributing health supplements.

The  acquisition  of  Neuro  by the  Company  was  accounted  for  as a  reverse
acquisition  under the purchase method of accounting  since the  shareholders of
Neuro obtained control of the consolidated entity. Accordingly,  the combination
of the two companies was recorded as a  recapitalization  of Life USA, Inc. with
Neuro  being  treated  as  the  continuing  entity.  The  historical   financial
statements presented are those of Neuro.

In January 2007,  the Company  ceased the  operations of Neuro.  The Company has
been unable to continue Nuero's operations due to financial constraints. At this
time,  the current  management  of the Company is in the process of developing a
new business plan.

                                       1

<PAGE>




BUSINESS

Plan of Operations

During the year ended December 2006, the Company focused on the execution of its
business  plan.  The  Company  was  committed  to  bridging  the gap between the
scientific  community,  health  care  providers,  and  the  health  consumer  by
promoting  the benefits of a personal  healthcare  strategy  involving  valuable
knowledge of nutrition and its effect on disease.

The Company has operated as a nutraceutical  marketing and distribution  company
with a strategic  focus of acquiring  intellectual  property and processes.  The
Company intended to market and distribute nutritional products and services in a
way that appeals to its target market.

The Company used its consumer website  www.EnhancedMetabolics.com  to market its
initial products, and also sells directly to resellers.

Products
--------
The Company offered two primary products:

Proprietary Krill Blend (currently offered)

         Krill oil is 100% natural and is marketed to promote cellular integrity
         and  cardiovascular  function.  Rich in Omega-3,  6 and 9 fatty  acids,
         krill  oil  provides   more  benefits  than  fish  oil  or  flax  seed.
         Independent  science on krill oil indicates it supports nerve and brain
         function,  joint  relief,  relieves  PMS-related  symptoms,   maintains
         healthy skin,  and supplies  anti-oxidant  nourishment to help the body
         retain its natural buoyancy, youthfulness, and overall quality of life.

         Krill oil will be targeted toward health  consumers that are seeking to
         combat cardiovascular problems, improving brain and nerve function, and
         joint health through diet, lifestyle changes and nutraceuticals.

Proprietary SierraSil and Krill Blend (currently in manufacturing)

         Life USA has combined forces with Sierra Mountain  Minerals.  SierraSil
         is a naturally  occurring  mineral that is marketed for promoting joint
         mobility and cartilage  integrity.  For the many sufferers of arthritis
         who are  searching  for a natural  drug-free  remedy to  promote  joint
         health, Life USA will market a proprietary blend of SierraSil and krill
         oil to be sold exclusively under the AgilFlex brand.

Capital Raising
----------------

The  Company's  operations  have  consumed  substantial  amounts  of  cash,  and
operational  cash  flows are  anticipated  to be  negative  for the  foreseeable
future.  There is  substantial  doubt  about our  ability to continue as a going
concern.

                                       2

<PAGE>




Competition
------------

The  nutraceutical  market  is  intensely   competitive.   The  Company  expects
competition  to intensify in the future  because  barriers to entry are minimal,
and current and new  competitors  can launch new sales efforts at relatively low
cost. In addition,  the industry is intensely  competitive.  Management believes
that the critical  success factors for companies  seeking to sell  nutraceutical
products include the following:  breadth and depth of product  offerings,  brand
recognition, and marketing.

The Company has been in  competition  with  numerous  traditional  suppliers and
distributors,  retail  stores,  grocery chains and online sellers of the same or
competitive products.  Although we anticipate that most of our protocols will be
complimentary to the more  traditional  pharmaceutical  approaches,  we could be
competing for the same consumer dollar.

Most competitors have longer operating  histories and larger customer bases than
the Company. In addition,  potential  competitors have greater brand recognition
and significantly greater financial, marketing and other resources.

Proprietary Rights
-------------------
The Company has proprietary  rights to Agilflex (TM), the  proprietary  blend of
Neptune  Krill  Oil (NKO (TM) ) and  Sierra  Sil (TM),  which  the  Company  has
developed.

Employees
----------
The Company is a  development  stage  company and  currently  has one  full-time
employee.   Management  of  the  Company  engages  consultants,   attorneys  and
accountants as necessary. Also see "Executive Compensation".

ITEM 2. DESCRIPTION OF PROPERTIES.
----------------------------------

Administrative Offices
----------------------
The Company  currently  maintains  office at 2300 Canyon Blvd. Suite 4, Boulder,
Colorado,  80302.  The Company pays $1,537 rent per month for the 1150 square ft
office.  During the year ended December 31, 2006, the Company was also obligated
to pay $535 per month rent on its  previous  office.  This  obligation  ended in
March 2006.

ITEM 3. LEGAL PROCEEDINGS.
--------------------------

The  Company  is not a  party  to any  pending  legal  proceedings,  and no such
proceedings are known to be contemplated.

No director,  officer or  affiliate  of the  Company,  and no owner of record or
beneficial  owner of more than 5.0% of the  securities  of the  Company,  or any
associate of any such director, officer or security holder is a party adverse to
the Company or has a material  interest  adverse to the Company in  reference to
any litigation.

                                       3

<PAGE>




ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS.
--------------------------------------------------------------

On November 17, 2006,  the Company held its annual  meeting of its  shareholders
The following matters were submitted to the record shareholders of the Company:

-    To elect three  directors to hold office  until the next annual  meeting of
     the  shareholders;  Wesley  Whiting,  Rich  Newton and Kelly  Kendall  (Mr.
     Kendall withdrew as a director candidate and did not serve after election.)

-    To  ratify  the  appointment  of  Jaspers  +  Hall,  PC as the  Independent
     Accountants for the annual period ending December 31, 2006.

-    To authorize the Board of Directors to change the name of the Company.

-    To authorize a reverse split of the Company's common stock on a basis of up
     to twelve for one.

At  the  meeting,  the  above  actions  were  approved  by  a  majority  of  the
shareholders present, and through proxy.

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
-----------------------------------------------------------------

During the fiscal  year ended  December  31,  2005,  the common  shares were not
traded in any venue or market.  Starting May 31, 2006, the Company's shares were
traded on the  Over-the-Counter  Bulletin  Board Market under the trading symbol
"LIFU.OB".  The  table  below  sets  forth  the high and low bid  prices  of the
Registrant's   common  stock  for  the  periods   indicated.   Such  prices  are
inter-dealer  prices,  without  mark-up,  mark-down  or  commissions  and do not
necessarily represent actual sales.

2005 FISCAL YEAR (1/1/05 through 12/31/05)

                                  High                      Low
                                  ----                      ---
1st Quarter                       No quotes                 No quotes
2nd Quarter                       No quotes                 No quotes
3rd Quarter                       No quotes                 No quotes
4th Quarter                       No quotes                 No quotes

2006 FISCAL YEAR (1/1/06 through 12/31/06)

                                  High                      Low
                                  ----                      ---
1st Quarter                       $0.00                     $0.00
2nd Quarter                        0.30                      0.30
3rd Quarter                        0.30                      0.30
4th Quarter                        0.02                      0.02

As  of  December  31,  2006,  there  were  49  shareholders  of  record  of  the
Registrant's common stock.

                                       4

<PAGE>




PENNY STOCK RESTRICTIONS

For transactions covered by the penny stock rules, the broker-dealer must make a
suitability determination for each purchaser and receive the purchaser's written
agreement prior to the sale. In addition,  the  broker-dealer  must make certain
mandated  disclosures in penny stock transactions,  including the actual sale or
purchase  price and  actual bid and offer  quotations,  the  compensation  to be
received  by the  broker-dealer  and  certain  associated  persons,  and deliver
certain disclosures required by the SEC. So long as Life USA's common shares are
considered  "penny  stocks",  many  brokers  will be reluctant or will refuse to
effect transactions in Life USA's shares, and many lending institutions will not
permit the use of penny stocks as collateral for any loans.

Effective  August  11,  1993,  the  Securities  and  Exchange   Commission  (the
"Commission")  adopted Rule 15g-9,  which established the definition of a "penny
stock," for purposes relevant to the Company,  as any equity security that has a
market price of less than $5.00 per share or with an exercise price of less than
$5.00 per share, subject to certain exceptions.  For any transaction involving a
penny  stock,  unless  exempt,  the rules  require:  (i) that a broker or dealer
approve a person's account for  transactions in penny stocks;  and (ii) that the
broker  or  dealer  receive  from  the  investor  a  written  agreement  to  the
transaction,  setting  forth the  identity and quantity of the penny stock to be
purchased.  In order to approve a person's  account  for  transactions  in penny
stocks,  the  broker  or  dealer  must  (i)  obtain  financial  information  and
investment  experience and objectives of the person;  and (ii) make a reasonable
determination that the transactions in penny stocks are suitable for that person
and that person has sufficient  knowledge and experience in financial matters to
be capable of evaluating the risks of transactions  in penny stocks.  The broker
or dealer  must also  deliver,  prior to any  transaction  in a penny  stock,  a
disclosure  schedule  prepared  by the  Commission  relating  to the penny stock
market,  which,  in highlight form, (i) sets forth the basis on which the broker
or dealer made the suitability determination; and (ii) states that the broker or
dealer  received a signed,  written  agreement  from the  investor  prior to the
transaction.  Disclosure  also has to be made  about the risks of  investing  in
penny  stock in both  public  offerings  and in  secondary  trading,  and  about
commissions payable to both the broker-dealer and the registered representative,
current  quotations for the securities and the rights and remedies  available to
an  investor  in cases of fraud in penny stock  transactions.  Finally,  monthly
statements  have to be sent  disclosing  recent price  information for the penny
stock held in the account and information on the limited market in penny stocks.

DIVIDENDS

The Company  has  neither  declared  nor paid any cash  dividends  on its common
stock, and it is not anticipated that any such dividend will be declared or paid
in the foreseeable future.
                                      5

<PAGE>




RECENT SALES OF UNREGISTERED SECURITIES

Unregistered sales for the year ended December 31, 2006 are set forth below.

DATE                       TITLE       NUMBER OF                 CONSIDERATION
                                       SHARES
                                       NUMBER OF
-----------------------------------------------------------------------

7/26/06      Common Stock             520,000          For consulting services

2/20/06      Warrants exercisable                      Convertible Promissory
             for common stock         50,000             Notes

4/13/06      Warrants exercisable                      Convertible Promissory
             for common stock        500,000             Notes


Exemption  From  Registration  Claimed

The above issuance by the Company of its unregistered securities was made by the
Company in reliance upon Section 4(2) of the  Securities Act of 1933, as amended
(the "Act"). The entities/individuals that purchased the unregistered securities
were known to the  Company and its  management,  through  pre-existing  business
relationships.  The  entities/individuals  were provided  access to all material
information which they requested,  and all information  necessary to verify such
information  and was afforded  access to management of the Company in connection
with the  issuance.  The holder of the  unregistered  securities  acquired  such
securities for investment and not with a view toward distribution, acknowledging
such intent to the Company.  All  certificates or agreements  representing  such
securities that were issued contained  restrictive legends,  prohibiting further
transfer of the certificates or agreements representing such securities, without
such  securities   either  being  first  registered  or  otherwise  exempt  from
registration under the Act in any further resale or disposition.


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
-----------------------------------------------------------------

Cautionary and Forward Looking Statements
-----------------------------------------
   In addition to  statements  of  historical  fact,  this Form 10-KSB  contains
forward-looking  statements.  The  presentation  of future  aspects of Life USA,
Inc.,  ("Life USA, Inc." the "Company" or "Issuer") found in these statements is
subject to a number of risks and  uncertainties  that could cause actual results
to differ  materially  from those  reflected  in such  statements.  Readers  are
cautioned not to place undue reliance on these forward-looking statements, which
reflect management's  analysis only as of the date hereof.  Without limiting the
generality of the foregoing,  words such as "may," "will," "expect,"  "believe,"
"anticipate,"  "intend,"  or  "could"  or the  negative  variations  thereof  or
comparable terminology are intended to identify forward-looking statements.

                                       6

<PAGE>




   These forward-looking  statements are subject to numerous assumptions,  risks
and uncertainties  that may cause Life USA, Inc. actual results to be materially
different  from any future  results  expressed  or implied by Life USA,  Inc. in
those  statements.  Important  facts  that could  prevent  Life USA,  Inc.  from
achieving any stated goals include, but are not limited to, the following:

(a)  volatility or decline of the Company's stock price;

(b)  potential fluctuation in quarterly results;

(c)  failure of the Company to earn revenues or profits;

(d)  inadequate  capital to continue or expand its business,  inability to raise
     additional capital or financing to implement its business plans;

(e)  failure to make sales on an increasing basis;

(f)  rapid and significant changes in markets;

(g)  litigation with or legal claims and allegations by outside parties; (h)
     insufficient revenues to cover operating costs.

     There is no assurance that the Company will be profitable,  the Company may
not be able to successfully develop, manage or market its products and services,
the  Company  may not be able to  attract  or retain  qualified  executives  and
personnel,  the Company's products and services may become obsolete,  government
regulation may hinder the Company's business, additional dilution in outstanding
stock ownership may be incurred due to the issuance of more shares, warrants and
stock options,  or the exercise of warrants and stock  options,  and other risks
inherent in the Company's businesses.

   The Company undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances  that arise after the date hereof.
Readers should  carefully  review the factors  described in other  documents the
Company  files from time to time with the  Securities  and Exchange  Commission,
including the Quarterly  Reports on Form 10-QSB and Annual Report on Form 10-KSB
filed by the  Company in 2004 and any  Current  Reports on Form 8-K filed by the
Company.

Changes in Operations
----------------------

The Company  acquired Neuro  Nutrition,  Inc. as a wholly owned  subsidiary,  in
September  2005,  in exchange for  8,300,000 shares of common stock.  The parent
company,  Life  USA,  Inc.  had  no  operations  until  the  acquisition  of its
subsidiary,  Neuro Nutrition, Inc. The operations of Neuro are presented in this
report as the successor company.

In January  2007,  the Company  ceased the  operations of Neuro  Nutrition,  its
wholly-owned subsidiary, due to financial constraints. At this time, the current
management of the Company is in the process of  developing a new business  plan,
and will seek an acquisition.

                                       7

<PAGE>




Comparison  of  Operating  Results  for the Year  Ended  December  31, 2006 and
December 31, 2005
--------------------------------------------------------------------------------

The Company had limited operating  revenues from sales of product in 2006 and in
2005.  Revenues for the year ended December 31, 2006 were $751,624,  and Cost of
Goods Sold amounted to $651,438 resulting in gross profit of $100,186.  Revenues
for the year  ended  December  31,  2005 were  $44,961,  and Cost of Goods  sold
amounted to $28,592  resulting  in a gross  profit of $16,369.  The  increase in
revenue was due in part to increased sales and marketing  activities through out
the year.

During the year ended December 31, 2006, the Company incurred operating expenses
of  $769,248,  compared to $615,355 for the year ended  December  31, 2005.  The
increase of  $153,893  was due in part to the  issuance of stock  options to the
directors and officers of the Company.  Operating  expenses included $760,858 of
general and administrative expenses and depreciation expense of $8,390.

The Company  experienced  an  operational  loss of  ($669,062) in the year ended
December 31, 2006 compared to an operational loss of ($598,986)  during the year
ended  December 31, 2005. The increase of $70,076 in loss was due in part to the
increase in general and administrative expenses over the previous period.

During the year ended  December 31, 2006,  the Company  recognized a net loss of
($759,626)  compared to  ($628,560)  for the year ended  December 31, 2005.  The
increase  of  $131,066  was due to the  increase  in  operational  expenses,  as
discussed above, and an increase in interest expense. The net loss per share was
($0.08) in the year ended  December 31, 2006 compared to a net loss per share of
($0.19) per share during the year ended December 31, 2005.

During the year ended  December  31, 2006,  Neuro,  the  Company's  wholly-owned
subsidiary  began  marketing  and  sales  of  its  products.  Due  to  financial
constraints the Company ceased the operations of Neuro in January 2007.

LIQUIDITY AND CAPITAL RESOURCES

At December  31,  2006,  the Company  had  $92,679 in current  assets  including
$11,999 in cash, and $0 in current product inventory.  At December 31, 2005, the
Company had $180,202 in current assets  including  $52,750 in cash, and $127,062
in current product inventory. The company had current liabilities of $994,153 as
of December 31, 2006,  which,  when compared with current assets shows a working
capital deficit of ($901,474) as of December 31, 2006.

During  the  years  ended  December  31,  2006  and  2005,  the  Company  issued
convertible  promissory notes for $630,000. The convertible promissory notes had
due dates  starting in May 2006 through  February 2007. The Company is currently
in default on the convertible promissory notes.

The  Company  does not have  sufficient  revenue  and  income  to  operate  in a
break-even   mode.  The  Company  plans  to  seek  a  business   acquisition  or
combination.  The Company will need to fund the  deficits in  operating  capital
through debt or private placements of its common stock, which is its sole source
of liquidity.

                                       8

<PAGE>




CASH FLOWS

The Company had negative cash flows from operating  activities in the year ended
December  31, 2006 and in the year ended  December  31,  2005.  The  increase in
negative  cash flow is  specifically  due to the  Company's  marketing  efforts,
salaries,  consulting,  administrative,  inventory  purchases and accounting and
legal.

NEED FOR ADDITIONAL FINANCING

The Company does not have capital  sufficient to meet the Company's  cash needs,
including the costs of compliance with the continuing reporting  requirements of
the  Securities  Exchange  Act of 1934.  The Company  will have to seek loans or
equity  placements to cover such cash needs. Lack of its existing capital may be
a sufficient  impediment to prevent it from  accomplishing the goal of expanding
its  operations.  There is no  assurance,  however,  that without  funds it will
ultimately allow the Company to carry out its business.

The  Company  will  need to  raise  additional  funds  to  expand  its  business
activities in the next twelve months.

No commitments to provide additional funds have been made by management or other
stockholders.  Accordingly,  there can be no assurance that any additional funds
will be  available  to the Company to allow it to cover its expenses as they may
be incurred.

Irrespective of whether the Company's cash assets prove to be inadequate to meet
the Company's  operational needs, the Company might seek to compensate providers
of services by issuances of stock in lieu of cash.

GOING CONCERN

The Company's auditor has issued a "going concern"  qualification as part of his
opinion in the Audit Report. There is substantial doubt about the ability of the
Company to continue as a "going concern." The Company has limited activities,
Limited  capital,  debt in the  amount  of  $994,153,  all of which is  current,
$11,999 in cash and minimal other liquid assets, and no capital commitments. The
effects of such conditions could potentially cause the Company's bankruptcy.

Management hopes to seek and obtain funding,  via loans or private placements of
stock for operations, debt and to provide working capital.

ITEM 7. FINANCIAL STATEMENTS.
-----------------------------

The  response  to this item is  submitted  as a separate  section of this report
beginning on page F-1.

ITEM  8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
-------------------------------------------------------------------------
FINANCIAL DISCLOSURE.
---------------------

None.

                                       9

<PAGE>




ITEM 8A. CONTROLS AND PROCEDURES
--------------------------------

a.       Evaluation of Disclosure Controls and Procedures:

The management of the company has evaluated the effectiveness of the issuer's
disclosure controls and procedures as of the end of the period of the report
(evaluation date) and have concluded that the disclosure controls internal
controls and procedures are adequate and effective based upon their evaluation
as of the evaluation date.

There  were no changes  in the small  business  issuers  internal  control  over
financial  reporting  identified  in  connection  with  the  Company  evaluation
required by  paragraph  (d) of Rule 13a-15 or Rule 15d-15 under the Exchange act
that occurred  during the small business  issuers fourth fiscal quarter that has
materially  affected or is  reasonable  likely to materially  affect,  the small
business issuers internal control over financial reporting.

ITEM 8A (T).  CONTROLS AND PROCEDURES
-------------------------------------
Not applicable.

ITEM 8B. OTHER INFORMATION

None.

                                       10

<PAGE>




                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
--------------------------------------------------------------------------------
WITH SECTION 16(A) OF THE EXCHANGE ACT.
---------------------------------------

The following individuals are the Company's directors and executive officers:

Name                       Position Held                      Tenure
- ------------------------------------------------------------------------------
Rick N. Newton             Chief Executive Officer and
(Mrl Newton resigned as    acting Chief Financial Officer     2005 - 2006
an Officer and Director,
January 2007)
Wesley F. Whiting          Acting President and Director      Since 2003 *

Background information about each director and executive officer is as follows:
------------------------------------------------------------------------------

Wesley Whiting, age 72, Acting Presiden, CFO, CEO and Director.
----------------------------------------------------------

Mr. Whiting was President,  director,  and secretary of Berge Exploration,  Inc.
(1978-88),  an oil and gas exploration company,  and President,  vice president,
and director of NELX, Inc.  (1994-1998),  engaged in real estate development and
attempts at  technology  development,  and was vice  president  and  director of
Intermountain   Methane  Corporation   (1988-91),   and  President  of  Westwind
Production,  Inc.  (1997-1998),  an oil and gas  exploration  company.  He was a
director  of  Kimbell  deCar  Corporation  (1998  until  2000)  and he has  been
President and a director of Sun River Energy, Inc. since 1998. He was a Director
of Colorado Gold & Silver, Inc. from 1999 to 2000. He was President and director
of Business  Exchange  Holding Corp. from 2000 to date and Acquisition  Lending,
Inc.  (2000 to date),  both of which are  private  holding  companies  for stock
investments.  He was director and Vice President of Utilitec, Inc, 1999 to 2003.
It sought to be an  environmental  remediation  business.  He was  president  of
Premium Enterprises,  Inc. October, 2002 to December 30, 2002 and was a director
of Premium Enterprises, Inc. from October 2002 to June 2003. Premium Enterprises
is  engaged  in the  "text  to  multimedia  conversion"  business.  He has  been
President and Director of Fayber Group, Inc. since 2003, which is dormant.

The following is the biographical information of those individuals who served as
officers and/or directors of the Company during the year ended December 31, 2006
and have resigned their positions.

Rick N. Newton
--------------
Mr. Newton has with more than 30 years of multi-industry experience ranging from
start-ups  to Fortune 10  corporations.  He has worked  with  hundreds  of these
projects  during his career as a corporate  intrapreneur  and  entrepreneur.  He
worked 16 years at IBM, the last half doing  Corporate  Venturing.  He worked at
American  Express,   responsible  for  the  Investment   Banking  marketing  and
operations of small, high growth companies.  Mr. Newton has a Bachelor degree in
Mechanical Engineering and an MBA from the University of Colorado.


                                       11

<PAGE>




Over the past 5 years Mr. Newton held the following corporate positions:  From
March 1999 to present  President and CEO of Wisdom in Action,  Inc., a privately
held small business;  From 1987 to present Executive director and CEO of Systems
Science  Institute,  a privately  held small  business.  From  September 2004 to
present  General  Partner of Conscious  Capital Fund LP,  privately held limited
Partnership. From September 2004 to present managing member of Conscious Capital
Management LLC,  privately held general partner of Conscious  Capital Fund. From
September 2004 to present managing member of Conscious  Capital  Consulting LLC,
privately  held limited  liability  company;  From January 2002 to December 2003
Chairman of Socially Responsible Private Equity Networks, Inc., a privately held
corporation;  College Bound Student  Alliance,  Inc., a publicly traded company,
chairman of the board of directors  from April 1999 to December  2002,  Director
from  April 1999 to January  2006,  and  Chairman  of the Audit  Committee  from
December  2002 to January  2005.  From  January 2000 to April 2005 member of the
Board of  Directors  and  Chairman of the  Compensation  Committee  of Chartwell
International,  Inc., a publicly traded company; From March 2005 to January 2006
Board of Directors at Kingsley Capital Inc., a privately held corporation.  From
January  2002 to January  2005  Board of  Directors  at Pasta  Fresca,  Inc.,  a
privately held corporation; From August 2000 to April 2001 Executive Director of
the  University of Colorado Bard  Entrepreneur  Center.  From July 1999 to April
2001 Chairman of the University of Colorado Rutt Bridges  Venture  Capital Fund;
From December  1998 to December  2001 Board of Directors of the Rockies  Venture
Club.   From  November  2003  to  October  2004  Vice   President   Finance  and
Administration  at BioCare  Systems,  Inc. a privately  held  corporation.  From
January 2004 to October 2005 Board of Directors of Wed Steps,  Inc., a privately
held corporation; From June 2000 to January 2002 founder and member of the Board
of Directors of Lighthouse Enterprise Holdings, Inc., a private company.

COMPLIANCE  WITH SECTION 16(A) OF EXCHANGE ACT

Section 16(a) of the Exchange Act requires the Company's officers and directors,
and certain persons who own more than 10% of a registered class of the Company's
equity  securities  (collectively,  "Reporting  Persons"),  to file  reports  of
ownership and changes in ownership  ("Section 16 Reports")  with the  Securities
and Exchange  Commission (the "SEC").  Reporting Persons are required by the SEC
to furnish the Company with copies of all Section 16 Reports they file.

No disclosure is containd herein about persons who failed to file Forms 3, 4, or
5, under Section 16(a)

                                       12

<PAGE>

ITEM 10. EXECUTIVE COMPENSATION.
--------------------------------

The  following  table  summarizes  the  compensation  of key  executive  ("Named
Executives") for the years ended December 31, 2006, 2005 and 2004, respectively.
No other  officers  of  directors  received  annual  compensation  in  excess of
$100,000 during the last three complete fiscal years.

<TABLE>
<CAPTION>
<S>                      <C>     <C>        <C>          <C>             <C>            <C>           <C>            <C>

                                               SUMMARY COMPENSATION TABLE (1)
                             ANNUAL COMPENSATION                                      LONG TERM COMPENSATION

                                                                          AWARDS         PAYOUTS         LTIP         ALL OTHER
                                                                                                      PAYOUTS($)     COMPENSATION
   NAME &                                                                               SECURITIES
  PRINCIPAL              YEAR    SALARY     BONUS ($)    OTHER ANNUAL    RESTRICTED     UNDERLYING
  POSITION                        ($)                    COMPENSATION    STOCK AWARDS     OPTIONS/
                                                                           ($)           SARS (#)

Richard N. Newton (1)
CEO                      2005    15,000       0               0            0             187,500
                         2006         -       0               0            0                   0

Michael Schuett (2)
President and Director   2005    46,666       0               0            0                   0
                         2006       -         0               0            0                   0

Kelly Kendall (3)        2004         0       0               0            0                   0
President                2005         0       0               0            0                   0

(1)      Mr. Newton resigned as an officer and director of the Company in January 2007.
(2)      Mr. Schuett resigned his position with the Company in 2006.
(3)      Ms. Kendall resigned as the President of the Company in 2005.

</TABLE>

                                       13

<PAGE>




                                               OPTION/SAR GRANTS TABLE

The following table provides  information relating to the grant of stock options
to the Company's executive officers during the year ended December 31, 2006.
<TABLE>
<CAPTION>
<S>                           <C>                      <C>                <C>                        <C>

                                                    Individual Grants
                                                    -----------------

     Name                     # of Underlying          % of Total         Exercise of Base Price     Expiration Date
     ----                     ---------------          ----------         ----------------------     ---------------
Rick M. Newton                    815,000                 62%                      $0.50                  2011
Michael Schuett                    26,667                  2%                      $0.50                  2011

</TABLE>

1 Based on a total of 1,338,124  options  granted in the year ended December 31,
2006.





             AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
                        FISCAL YEAR END OPTION/SAR VALUES

The  following  table  provides  information  relating to the  exercise of stock
options  during the year ended  December  31,  2006 by the  Company's  executive
officers and the 2006 fiscal year-end value of unexercised options.
<TABLE>
<CAPTION>
<S>            <C>             <C>        <C>                                       <C>

                 SHARES         VALUE     NUMBER OF SECURITIES UNDERLYING             VALUE OF UNEXERCISED
               ACQUIRED ON     REALIZED       UNEXERCISED OPTIONS/SARS               IN-THE-MONEY OPTIONS/SAR
NAME           EXERCISE (#)      ($)                   AT FY-END                           AT FY-END ($)

                                             EXERCISABLE/UNEXERCISABLE              EXERCISABLE/UNEXERCISABLE
                                             -------------------------              -------------------------

Rick M. Newton      0            0                   815,000/0                                $16,300/0

Michael Schuett     0            0                    26,667/0                                   $533/0

(1) The  average  of the  closing  bid and asked  price of the  common  stock on
December 31, 2006 ($0.02) was used to calculate the option value.
</TABLE>

                                       14

<PAGE>




Directors' Compensation
------------------------

The following table sets forth the compensation,  if any, paid by the Company to
those directors who served on the Company's  Board of Directors  during the year
ended December 31, 2006.
<TABLE>
<CAPTION>
<S>                 <C>             <C>    <C>       <C>               <C>                <C>         <C>

                             Directors' Compensation

Name                Fees            Stock   Options  Non-Equity        Nonqualified       All Other   Total
                    Earned or       Awards  Awards   Incentive Plan    Deferred           Compen-      ($)
                    Paid-in         ($)     ($)      Compensation      Compensation       sation
                    Cash ($)                         ($)               ($)                ($)

Wesley Whiting         $0            $0      $0(2)    $0                $0                  $0          $0

Steve Parkinson (1)    $0            $0      $0(3)    $0                $0                  $0          $0

Rick Newton (1)        $0            $0      $0(4)    $0                $0                  $0          $0

Micheal Schuett (1)    $0            $0      $0(5)    $0                $0                  $0          $0

Kelly Kendall (1)      $0            $0      $0(6)    $0                $0                  $0          $0

Leland E. Watson (1)   $0            $0      $0(7)    $0                $0                  $0          $0
</TABLE>


(1)  These  individuals  have resigned as directors of the Company  during 2006.
     Mr. Newton resigned as a director of the Company in January 2007.

(2)  During the year ended December 31, 2006,  Mr.  Whiting was granted  options
     exercisable  for 40,000 shares of the Company's  common stock.  The options
     have an  exercise  price of $0.50 per share and a term of five  years.  The
     options were fully vested upon issuance.

(3)  During the year ended  December  31,  2006,  Mr.  Parkinson  was granted an
     option  exercisable  for 10,000 shares of the Company's  common stock.  The
     option has an  exercise  price of $0.50 per share and a term of five years.
     The option was fully vested upon issuance.

(4)  During the year ended  December 31, 2006,  Mr.  Newton was granted  options
     exercisable for 815,000 shares of the Company's  common stock.  The options
     have an  exercise  price of $0.50 per share and a term of five  years.  The
     options were fully vested upon issuance.

(5)  During the year ended  December 31, 2006,  Mr.  Shuett was granted  options
     exercisable  for 26,667 shares of the Company's  common stock.  The options
     have an  exercise  price of $0.50 per share and a term of five  years.  The
     options were fully vested upon issuance.

(6)  During the year ended December 31, 2006,  Mr.  Kendall was granted  options
     exercisable  for 30,000 shares of the Company's  common stock.  The options
     have an  exercise  price of $0.50 per share and a term of five  years.  The
     options were fully vested upon issuance.

(7)  During the year ended  December 31, 2006,  Mr.  Watson was granted  options
     exercisable  for 20,000 shares of the Company's  common stock.  The options
     have an  exercise  price of $0.50 per share and a term of five  years.  The
     options were fully vested upon issuance.

As of the date of filing this report,  the Company does not have any  employees.
None of the  directors is accruing any  compensation  pursuant to any  agreement
with the Company. No retirement,  pension, profit sharing, or insurance programs
or other  similar  programs  have been adopted by the Company for the benefit of
its employees.  The Board of Directors of the Company has adopted a stock option
plan. The plan allows grants up to a total of 2,000,000 stock options.

                                       15

<PAGE>




Long Term Compensation Plans and Stock Options.
-----------------------------------------------
The  Company  does not have a long term  compensation  plans,  but the Board has
adopted an Employee  Consultant Stock Option Plan. The Board has authorized that
2,000,000  shares be reserved for the plan.  During the year ended  December 31,
2006,  the Board granted  options  exercisable  for 1,338,124  shares to various
consultants,  officers and  directors.  All options  granted under the plan were
fully vested at the time of issuance.

Audit Committee
----------------
The Company  does not have an Audit  Committee.  The members of the Board sit as
the Audit Committee.

Code of Ethics
--------------
The  Company  has not  adopted a Code of Ethics  for the Board and the  salaried
employees.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
-----------------------------------------------------------------------

The  following  table sets  forth,  as of  December  31,  2006,  the  beneficial
ownership  of Common  Stock by each  person  who is known by the  Company to own
beneficially  more than 5% of the issued and  outstanding  Common  Stock and the
shares of Common Stock owned by each nominee and all officers and Directors as a
group.  Each person has sole voting and investment power as to all shares unless
otherwise indicated.

SHAREHOLDERS/BENEFICIAL                     NUMBER OF              OWNERSHIP
OWNERS                                       SHARES                PERCENTAGE(1)
 -------------------------------------------------------------------------------
Steve Parkinson                             2,010,000 (2)                14%
2300 Canyon Blvd. Suite 4
Boulder CO 80302

Michael Schuett                             1,866,667 (3)                13%
2300 Canyon Blvd. Suite 4
Boulder, CO 80302

John Bradley and
Bradley Family Trust                          962,080 (4)               6.5%
2300 Canyon Blvd. Suite 4
Boulder, CO 80302

Rick Newton, CEO                              815,000 (5)(7)           5.5 %
2300 Canyon Blvd. Suite 4
Boulder, CO 80302

Wesley F. Whiting, Director                    60,000 (6)(7)             <1%
10200 W. 44th Ave., Suite 210E
Wheat Ridge, CO 80033
                                             ---------                  -----
All directors and executive
officers as a group (2 persons)               875,000 (7)                 6%
                                             =========                  =====

                                       16

<PAGE>




(1)  Based upon  10,060,534  shares of common stock issued and  outstanding  and
     assuming the exercise of warrants  exercisable  for 1,908,788  shares,  the
     exercise of options  exercisable for 1,338,124 shares and the conversion of
     convertible  promissory  notes  convertible  for  1,490,303  shares.  Fully
     diluted  there  would be  14,797,749  shares of  common  stock  issued  and
     outstanding.

(2)  Mr.  Parkinson  holds  2,000,000  shares of common stock and holds  options
     exercisable  for  10,000  shares of common  stock for a total of  2,010,000
     shares.

(3)  Mr.  Shuett  holds  1,840,000  shares  of common  stock  and holds  options
     exercisable for 26,667 shares for a total of 1,866,667 shares.

(4)  Mr.  Bradley owns  462,080  shares of common  stock  directly.  The Bradley
     Family  Trust  holds  500,000  common  shares,  of which Mr.  Bradley  is a
     beneficial owner.

(5)  Mr. Newton holds options exercisable for 815,000 shares of common stock.

(6)  Mr.  Whiting  holds  20,000  shares  of  common  stock  and  holds  options
     exercisable for 40,000 shares of common stock for a total of 60,000 shares.

(7)  The number of shares and percent assume the exercise of all options.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
--------------------------------------------------------

No officer,  director,  or  affiliate of the Company has or proposes to have any
direct or indirect material interest in any asset proposed to be acquired by the
Company through security holdings, contracts, options, or otherwise.

During the year ended  December 31, 2006,  the  following  who were officers and
directors of the Company,  at the time, were granted options under the Company's
stock option plan in the amounts  listed.  The options have an exercise price of
$0.50 per share, a term of 5 years and were fully vested upon issuance.

                  Wesley Whiting                      40,000 shares
                  Rick Newton                         815,000 shares
                  Michael Schuett                     26,667 shares
                  Kelly Kendall                       30,000 shares
                  Steve Parkinson                     10,000 shares
                  Leland Watson                       20,000 shares

The Registrant  executed a Plan & Agreement of  Reorganization  ("Agreement") by
and among the  Registrant,  and Neuro  Nutrition,  Inc., a Colorado  corporation
("Neuro Nutrition, Inc."), and shareholders of 100% of the common stock of Neuro
Nutrition on September 9, 2005 (the "Neuro Nutrition  Shareholders").  Under the
Agreement (i) the Registrant would issue 8,300,000 shares of its common stock to
the Neuro  Nutrition  Shareholders  in exchange  for 100% of the common stock of
Neuro Nutrition,  (ii) Neuro Nutrition would become a wholly-owned subsidiary of
the Registrant. Neuro Nutrition was organized in Colorado on July 23, 2004.

The  Registrant  relied upon Section 4(2) of the Securities Act for the exchange
of shares.  It believed  that Section 4(2) was  available  because the offer and
exchange did not involve a public offering and there was no general solicitation
or general advertising involved in the offer or sale.

Michael  Schuett and Steve  Parkinson,  (former  officers  and  directors of the
Company) became  shareholders  of 2,000,000  shares each as a result of the Plan
and Agreement of  Reorganization,  and the  resulting  Share  Exchange.  Bradley
Family  Trust  also  became  holder of  754,000  shares as a result of the above
described transaction.

Mr. Schuett was an officer and director and received  salary from the Company in
2005 of $46,666. Rick Newton was CEO and received $15,000 in salary.

                                       17

<PAGE>





ITEM 13  EXHIBITS.
-----------------
(a)  Documents filed as a part of this report:
     -----------------------------------------

         Exhibits:

          31   CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT
          32   CERTIFICATION OF DISCLOSURE  PURSUANT TO 18 U.S.C.  SECTION 1350,
               AS ADOPTED PURSUANT TO SECTION 906 OF THE  SARBANES-OXLEY  ACT OF
               2002



ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
-----------------------------------------------
General.  Jaspers  + Hall,  PC,  CPAs  ("Jaspers")  is the  Company's  principal
auditing  accountant  firm.  The  Company's  Board of Directors  has  considered
whether the provisions of audit services is compatible with maintaining Jaspers'
independence.

Audit  Fees.  Jaspers  + Hall  billed  the  Company  $5,000  for  the  following
professional  services:  audit of the financial  statements of Neuro  Nutrition,
Inc.  for the nine month  period ended  September  30,  2005,  and review of the
interim  financial  statements  included in quarterly reports on Form 10-QSB for
the period ended September 30, 2005. Jaspers + Hall did not bill the Company for
services prior to the September 30, 2005, review.

During the year ended  December  31,  2006,  the Company was billed by Jaspers +
Hall for the following services $ 9,000.

There were no audit related fees in 2006 or 2005.

There  were no tax  fees or  other  fees in  2006 or 2005  paid to  Auditors  or
Auditors' affiliates.

The  Company's  Board  acts as the  audit  committee  and  had no  "pre-approval
policies and  procedures"  in effect for the auditors'  engagement for the audit
year 2006 and 2005.

All audit work was performed by the auditors' full time employees.

                                       18

<PAGE>

                              FINANCIAL STATEMENTS
                                TABLE OF CONTENTS
                               For the Years Ended
                           December 31, 2006 and 2005




                                                               PAGE
                                                              -------

INDEPENDENT AUDITOR'S REPORT.............................     F-1

BALANCE SHEETS...........................................     F-2

STATEMENT OF OPERATIONS ...................................   F-3

STATEMENT OF CASH FLOWS...................................    F-4

STOCKHOLDERS' EQUITY (DEFICIT)............................    F-5

NOTES TO FINANCIAL STATEMENTS..............................   F-6 - F-18


<PAGE>


                                 Life USA, Inc.
                          (A DEVELOPMENT STAGE COMPANY)
                              FINANCIAL STATEMENTS

                      FOR THE YEAR ENDED DECEMBER 31, 2006


<PAGE>


JASPERS + HALL, PC
CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------------------------------------
9175 Kenyon Avenue, Suite 100
Denver, CO 80237
303-796-0099

To the Board of Directors
Life USA, Inc.

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have audited the accompanying consolidated balance sheet of Life USA, Inc. as
of  December  31,  2006 and 2005,  and the related  consolidated  statements  of
operations,  cash flows, and changes in stockholders' deficit for the years then
ended and for the period July 23, 2004  (inception) to December 31, 2006.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Art Boutique,  Inc. at December
31, 2006 and 2005,  and the results of its operations and its cash flows for the
years then ended and for the period May 15, 1984  (inception)  to  December  31,
2006, in conformity with accounting  principles generally accepted in the United
States.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  described  in  Note 2 to the
financial  statements,  the Company is in the  development  stage and conditions
exist which raise substantial doubt about the Company's ability to continue as a
going  concern.  Management's  plans in regard to these matters are described in
Note 2. The  financial  statements  do not  include any  adjustments  that might
result from the outcome of this uncertainty.



March 31, 2007
/s/Jaspers + Hall PC



                                      F-1

<PAGE>
<TABLE>
<CAPTION>

                                 LIFE USA, INC.
                          (A Development Stage Company)
                           Consolidated Balance Sheets

<S>                                                                           <C>                   <C>


                                                                                December 31,          December 31,
                                                                                    2006                  2005
                                                                              -----------------     -----------------
Assets
Current Assets:
         Cash                                                                         $ 11,999              $ 52,750
         Accounts receivable - trade                                                    44,402                   646
         Accounts receivable - other                                                     8,581                 5,925
         Inventory                                                                           -               120,762
         Prepaid expenses                                                               26,032                   119
         Deposit                                                                         1,665
                                                                              -----------------     -----------------
                 Total Current Assets                                                   92,679               180,202

Other assets:
         Fixed assets, net                                                                   -                 8,225
                                                                              -----------------     -----------------
                 Total other assets                                                          -                8,225

Total assets                                                                          $ 92,679             $ 188,427
                                                                              =================     =================


Liabilities and Stockholders' Deficit
Current liabilities:
         Accounts payable                                                            $ 331,309              $ 99,805
         Accrued expenses                                                                    -                 3,329
         Notes payable                                                                  32,844                17,376
         Convertible notes payable                                                     630,000               500,000
                                                                              -----------------     -----------------
                 Total current liabilities                                             994,153               620,510
                                                                              -----------------     -----------------

Commitments and Contingencies (Note)

Stockholders' deficit
         Common stock, $0.0001 par value; 100,000,000 shares                             1,006                   954
           authorized 10,060,534 and 9,540,534 shares issued and
           outstanding, December 31, 2006 and
           December 31, 2005, respectively
         Additonal paid in capital                                                     485,706               195,523
         Deficit accumulated during the development stage                           (1,388,186)             (628,560)
                                                                              -----------------     -----------------
                 Total stockholders' deficit                                          (901,474)             (432,083)
                                                                              -----------------     -----------------

Total liabilities and stockholders' deficit                                           $ 92,679             $ 188,427
                                                                              =================     =================

</TABLE>

The  accompanying  notes are an  integral  part of these  consolidate  financial
statements.


                                      F-2

<PAGE>
<TABLE>
<CAPTION>

                                 LIFE USA, INC.
                         (A Development Stage Company)
                     Consolidated Statements of Operations



<S>                                                      <C>                    <C>                    <C>

                                                                                                        July 23, 2004
                                                                                                        (Inception) to
                                                                     December 31,                        December 31,
                                                              2006                   2005                    2006
                                                         ---------------        ---------------        -----------------
Revenue:
         Revenue                                              $ 751,624               $ 44,961                $ 796,585
         Cost of sales                                         (651,438)               (28,592)                (680,030)
                                                         ---------------        ---------------        -----------------
         Gross Profit                                           100,186                 16,369                  116,555
                                                         ---------------        ---------------        -----------------
Operational expenses:
         Goodwill write off                                           -                 14,454                   14,454
         General and administrative                             760,858                475,460                1,236,318
         Impairment loss                                              -                116,667                  116,667
         Depreciation and amortization                            8,390                  8,774                   17,164
                                                         ---------------        ---------------        -----------------
         Total operational expenses                             769,248                615,355                1,384,603
                                                         ---------------        ---------------        -----------------
Loss from operations                                           (669,062)              (598,986)              (1,268,048)
                                                         ---------------        ---------------        -----------------
Other income (expense):
         Interest expense                                       (90,564)               (29,574)                (120,138)
                                                         ---------------        ---------------        -----------------
Net loss                                                      $(759,626)             $(628,560)             $(1,388,186)
                                                         ===============        ===============        =================
Per share information:
Net (loss) per common share
         basic and fully diluted                              $   (0.08)             $   (0.19)
                                                         ===============        ===============

Weighted average number of common
         stock outstanding                                    9,774,178              3,289,148
                                                         ===============        ===============

The  accompanying  notes are an  integral  part of these  consolidate  financial
statements.

</TABLE>

                                      F-3

<PAGE>
<TABLE>
<CAPTION>

                                 LIFE USA, INC.
                         (A Development Stage Company)
                      Consolidate Statement of Cash Flows


<S>                                                             <C>                  <C>                   <C>

                                                                                                            July 23, 2004
                                                                                                            (Inception) to
                                                                           December 31,                      December 31,
                                                                    2006                 2005                    2006
                                                                --------------       --------------        -----------------
Cash flows from operating activities:
         Net loss                                                   $(759,626)           $(628,560)            $ (1,388,186)
         Adjustments to reconcile net loss to net cash used
           by operating activities
           Stock warrants expenses for services                       134,235               64,107                  198,342
           Stock issuance for services                                156,000                  275                  156,275
           Amortization and depreciation                                8,224                8,774                   16,998
           Goodwill write off                                               -               14,454                   14,454
           Impairment loss                                                  -              116,667                  116,667
         Changes in operating assets and liabilities
           Increase in accounts receivable                            (46,412)              (6,571)                 (52,983)
           Decrease (increase) in inventory                           108,983             (120,762)                       -
           Increase in prepaid expenses                               (15,798)                (119)                 (27,696)
           Increase in accounts payable                               225,314               99,751                  325,065
           Increase in accrued expenses                                 2,861                3,329                    6,190
                                                                --------------       --------------        -----------------
           Total adjustments                                          573,407              179,905                  753,312
                                                                --------------       --------------        -----------------
             Net cash used in operating activities                   (186,219)            (448,655)                (634,874)
                                                                --------------       --------------        -----------------
Cash flows from investing activities:
           Equipment acquired                                               -               (8,666)                  (8,666)
                                                                --------------       --------------        -----------------
             Net cash used in investing activities                          -               (8,666)                  (8,666)

Cash flows from financing activities:
           Proceeds from note payables                                145,468              502,296                  647,764
           Proceeds from stock issuance                                     -                7,775                    7,775
                                                                --------------       --------------        -----------------
           Net cash flows provided by financing activities            145,468              510,071                  655,539
                                                                --------------       --------------        -----------------
Net (decrease) increase in cash                                     $ (40,751)            $ 52,750                 $ 11,999
                                                                --------------       --------------        -----------------
Cash and cash equivalents, beginning                                   52,750                    -                        -
                                                                --------------       --------------        -----------------
Cash and cash equivalents, ending                                    $ 11,999             $ 52,750                 $ 11,999
                                                                ==============       ==============        =================
Supplemental disclosure of cash flow information:
         Cash paid for interest                                       $ 2,086                $ 119                  $ 2,205
         Cash paid for income taxes                                       $ -                  $ -                      $ -
                                                                ==============       ==============        =================
Supplemental disclosure of non-cash transactions:
         Stock warrants issued for services                         $ 134,235             $ 64,107              $ 2,195,438
         Stock issued for services                                  $ 156,000                $ 275                $ 156,275
         Acquisition of tradename for 250,000
           shares of common stock                                         $ -            $ 125,000                $ 125,000
         Note payable assumed in reverse takeover                         $ -             $ 15,080                 $ 15,080
                                                                ==============       ==============        =================

</TABLE>

The  accompanying  notes are an  integral  part of these  consolidate  financial
statements.

                                      F-4

<PAGE>
<TABLE>
<CAPTION>

                                 LIFE USA, INC.
                         (A Development Stage Company)
                       Consolidated Stockholders' Deficit

<S>                                         <C>             <C>           <C>             <C>                <C>

                                                                                              Deficit
                                                                           Additional      accum. during
                                              Comon Stock                   paid-in        the development
                                            # of Shares       Amount        capital            stage            Totals
                                            ------------    -----------   -------------   ----------------   --------------
Balance - July 23, 2004 (Inception)                   -            $ -             $ -                $ -              $ -
                                            ------------    -----------   -------------   ----------------   --------------
Balance  - December 31, 2004                          -              -               -                  -                -
                                            ------------    -----------   -------------   ----------------   --------------
Recapitalization                                786,534             79        (134,259)                 -         (134,180)
Stock issued for tradename                      250,000             25         124,975                  -          125,000
Stock issued for services                       275,000             27             248                  -              275
Warrants granted for services                         -              -          64,107                  -           64,107
Stock issued for acquisition                  7,775,000            778           6,997                  -            7,775
Stock issued for cash                           454,000             45         113,455                  -          113,500
Forgiveness of debt                                   -              -          20,000                  -           20,000
Net loss                                              -              -               -           (628,560)        (628,560)
                                            ------------    -----------   -------------   ----------------   --------------
Balance - December 31, 2005                   9,540,534            954         195,523           (628,560)        (432,083)
                                            ------------    -----------   -------------   ----------------   --------------
Issuance of common stock for services           520,000             52         155,948                  -          156,000
Warrants granted for services                         -              -         134,235                  -          134,235
Net loss                                              -              -               -           (759,626)        (759,626)
                                            ------------    -----------   -------------   ----------------   --------------
Balance - December 31, 2006                  10,060,534        $ 1,006       $ 485,706       $ (1,388,186)      $ (901,474)
                                            ============    ===========   =============   ================   ==============

</TABLE>

The  accompanying  notes are an  integral  part of these  consolidate  financial
statements.

                                      F-5

<PAGE>
                                 LIFE USA, INC.
                         (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended December, 31, 2006 and 2005

Note 1. ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION:

Life USA, Inc. (the "Company") was  incorporated  in Colorado in January,  1997.
The Company was  originally  named  Lifeline USA, Inc. On January 16, 2007,  the
Company changed its name to Life USA, Inc. by filing an amendment to its Article
of Incorporation.  To resolve an administrative  dissolution by the Secretary of
State, the Company was reincorporated in 2002. The Company shareholders approved
reincorporation  of Life USA,  Inc. in 2001,  and then the  directors  acting as
trustees entered into a merger of the old Life USA, Inc. with the reincorporated
Life USA,  Inc. The Company was  organized to engage in any activity or business
not in conflict  with the laws of the State of Colorado or of the United  States
of America.

In 2001, the Company  entered into a Share Exchange  Agreement with World Health
Management,  Inc.  shareholders  ("World Health") in which the Company exchanged
58,384  shares of its  common  stock to  shareholders  of World  Health  for the
control of World Health, which was liquidated.

On September 13, 2005, Life USA, Inc. and Neuro Nutrition, Inc. ("Neuro") signed
an  agreement  whereby,  Life USA  purchased  all of the issued and  outstanding
shares of Neuro Nutrition,  Inc. for 8,300,000 shares of its common stock. Neuro
then became a 100% wholly owned subsidiary of Life USA, Inc.

The  acquisition  of  Neuro  by the  Company  was  accounted  for  as a  reverse
acquisition  under the purchase method of accounting  since the  shareholders of
Neuro obtained control of the consolidated entity. Accordingly,  the combination
of the two companies was recorded as a  recapitalization  of Life USA, Inc. with
Neuro  being  treated  as  the  continuing  entity.  The  historical   financial
statements presented are those of Neuro.

Neuro was  incorporated  on July 23, 2004, as 4 Your Life Nutrition Inc., in the
state of Colorado,  and has been in the  development  stage since.  There was no
activity  until January 2005. On January 6, 2005, the Company's name was changed
to  Neuro  Nutrition  Inc.  It  is  primarily   organized  for  the  purpose  of
distributing health supplements.

In January  2007,  the Company  ceased  operations of Neuro.  At that time,  the
inventory of the Company was liquidated.

BASIS OF PRESENTATION:

The accompanying  consolidated financial statements include the accounts of Life
USA, Inc. and its wholly-owned  subsidiary,  Neuro. All significant intercompany
transactions and balances have been eliminated in consolidation.

                                      F-6

<PAGE>


                                 LIFE USA, INC.
                         (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended December, 31, 2006 and 2005

Development Stage Company

The  Company  has  not  earned   significant   revenue  from  planned  principal
operations.  Accordingly,  the Company's  activities  have been accounted for as
those of a "Development  Stage Enterprise" as set forth in Financial  Accounting
Standards Board  Statement No. 7 ("FASB 7"). Among the  disclosures  required by
FASB 7 are that the Company's  financial  statements be identified as those of a
development stage company, and that the statements of operations,  stockholders'
equity  (deficit)  and  cash  flows  disclose  activity  since  the  date of the
Company's inception.

SIGNIFICANT ACCOUNTING POLICIES:

Cash and Cash Equivalents

The Company  maintains the majority of its cash  accounts at a commercial  bank.
The total cash balance is insured by the Federal Deposit  Insurance  Corporation
("FDIC") up to $100,000  per  commercial  bank.  As of December  31,  2005,  the
Company had zero amounts in excess of the FDIC insured  limits.  For purposes of
the  statement of cash flows,  the Company  considers all cash and highly liquid
investments  with  initial  maturities  of  three  months  or  less  to be  cash
equivalents.

Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and assumptions that affects the reported amounts of assets and liabilities, and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period.  Such  estimates  may be  materially  different  from  actual  financial
results.  Significant  estimates include the recoverability of long-lived assets
and the collectibility of accounts receivable.

Accounts Receivable

The Company  grants  limited  credit to  customers  within the United  States of
America.  Almost all retail  transactions  are charged  against  the  customer's
credit card  account  before  shipment.  The  company  has  limited  receivables
outstanding.  A small allowance for doubtful  accounts has been  established for
one specific receivable.

Inventory

The Company's inventory consists of raw materials and finished goods.  Inventory
is valued on a  first-in-first-out  (FIFO) basis. During the year ended December
31,  2006,  the  Company  wrote  off  its  existing  inventory  as  discontinued
operations. The inventory was returned to vendors.

                                      F-7

<PAGE>



                                 LIFE USA, INC.
                         (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended December, 31, 2006 and 2005

Property and Equipment

Property and equipment,  including renewals and betterments, are stated at cost.
Property and Equipment was limited to investments in two computers,  and limited
furniture.  Depreciation  is  computed  on the  straight-line  method  over  the
following estimated useful lives of the related assets,  which range from two to
five years, and are as follows:

                  Furniture and fixtures           5 years
                  Equipment - electronic           2 years

Long Lived Assets

The Company's management assesses the recoverability of its long-lived assets by
determining  whether the depreciation and amortization of long lived assets over
their remaining lives can be recovered  through  projected  undiscounted  future
cash flows. The amount of long lived asset impairment, if any, is measured based
on fair  value and is charged  to  operations  in the period in which long lived
assets  impairment is determined by  management.  During the year ended December
31, 2005, the Company's  management  believed the existing  Rosedale  long-lived
asset was fully impaired, and was written off accordingly. At December 31, 2006,
the Company had no long-lived assets.

Accounting For Obligations and Instruments  Potentially Settled in the Company's
Common Stock

The Company  accounts for obligations and instruments  potentially to be settled
in the  Company's  stock in accordance  with  Emerging  Issues Task Force (EITF)
Issue No. 00-19, Accounting For Derivative Financial Instruments Indexed to, and
Potentially  Settled in a Company's Own Stock.  This issue addresses the initial
balance sheet  classification  and measurement of contracts that are indexed to,
and potentially settled in, the Company's stock. Under EITF 00-19, contracts are
initially classified as equity or as either assets or liabilities,  depending on
the  situation.   All  contracts  are  initially  measured  at  fair  value  and
subsequently accounted for based on the then current  classification.  Contracts
initially classified as equity do not recognize subsequent changes in fair value
as long as the  contracts  continue to be  classified  as equity.  For contracts
classified as assets or  liabilities,  the Company reports changes in fair value
in earnings and discloses  these changes in the financial  statements as long as
the  contracts  remain  classified  as  assets  or  liabilities.   If  contracts
classified  as assets or  liabilities  are  ultimately  settled in  shares,  any
previously  reported gains or losses on those contracts  continue to be included
in earnings.  The  classification  of a contract is  reassessed  at each balance
sheet date.

Revenue Recognition

Revenues  from  products  are  recognized  at the time goods are  shipped to the
customer.

                                      F-8

<PAGE>






                                 LIFE USA, INC.
                         (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended December, 31, 2006 and 2005

Loss Per Share of Common Stock

Basic net loss per share of common stock is computed using the weighted  average
number of common  stock  outstanding  during the  period.  Diluted  net loss per
share,  does not differ  from basic net loss per share  since  potential  common
shares  from stock  options  and  warrants  are  anti-dilutive  for all  periods
presented and are therefore excluded from the calculation.

Fair Value of Financial Instruments

The carrying amount of accounts  payable and accrued  expenses are considered to
be  representative  of their  respective  fair values  because of the short-term
nature of these financial instruments.

Other Comprehensive Income

The Company has no material components of other comprehensive  income (loss) and
accordingly, net loss is equal to comprehensive loss in all periods.

Federal Income Taxes

The Company  accounts  for income taxes under SFAS No. 109,  which  requires the
asset and liability  approach to accounting for income taxes. Under this method,
deferred tax assets and  liabilities  are measured based on differences  between
financial  reporting  and tax bases of assets  and  liabilities  measured  using
enacted tax rates and laws that is expected to be in effect when differences are
expected to reverse.

Segment Information

The Corporation operates primarily in a single operating segment, selling health
supplements.

Stock Based Compensation

The Company issued stock options and warrants to certain  contractors  for their
performed  services.  The value of the shares and the warrants  were expensed as
professional  fees.  The warrant value was  determined by applying SFAS No. 123R
and EITF 98.16.  The used method was  Black-Scholes  based on variables  derived
from The implied  volatility and implied stock price of the most recently issued
convertible notes payable,  which had warrants  attached.  Volatility was set at
76.5% and the risk free rate at 4.36%.  No other  stock based  compensation  was
granted.

                                      F-9



<PAGE>









                                 LIFE USA, INC.
                         (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended December, 31, 2006 and 2005

Earnings (Loss) Per Share Calculation

Basic net loss per share of common stock is computed using the weighted  average
number of common  stock  outstanding  during the  period.  Diluted  net loss per
share,  does not differ  from basic net loss per share  since  potential  common
shares  from stock  options  and  warrants  are  anti-dilutive  for all  periods
presented and are therefore excluded from the calculation.

SIGNIFICANT ACCOUNTING POLICIES:

In February 2006, the FASB issued SFAS No. 155,  "Accounting  for Certain Hybrid
Financial  Instruments-an  amendment  of FASB  Statements  No.133  and 140",  to
simplify  and  make  more  consistent  the  accounting  for  certain   financial
instruments.  SFAS No. 155  amends  SFAS No.  133,  "Accounting  for  Derivative
Instruments and Hedging Activities," to permit fair value re-measurement for any
hybrid financial  instrument with an embedded  derivative that otherwise require
bifurcation, provided that the whole instrument is accounted for on a fair value
basis.  SFAS No. 155 amends  SFAS No. 140,  "Accounting  for the  Impairment  or
Disposal of Long-Lived Assets," to allow a qualifying  special-purpose entity to
hold a derivative  financial  instrument that pertains to a beneficial  interest
other than other derivative  financial  instrument.  SFAS No. 155 applies to all
financial  instruments  acquired or issued  after the  beginning  of an entity's
first fiscal year that begins after September 15, 2006, with earlier application
allowed.  The  adoption  of this  statement  is not  expected to have a material
effect on our  company's  future  reported  financial  position  or  results  of
operations.

In March  2006,  the FASB  issued SFAS No. 156,  "Accounting  for  Servicing  of
financial  Assets,  an  amendment  of FASB  statement  No. 140,  Accounting  for
transfers and Servicing of Financial Assets and Extinguishments of Liabilities."
This  statement   requires  all  separately   recognized  assets  and  servicing
liabilities be initially measure at fair value, if practicable,  and permits for
subsequent  measurement using either fair value measurement with changes in fair
value reflected in earnings or the amortization  and impairment  requirements of
Statement No. 140. The Subsequent measurement of separately recognized servicing
assets and  servicing  liabilities  at fair value  eliminates  the necessity for
entities  that  manage the risks  inherent  in  servicing  assets and  servicing
liabilities  with  derivatives  to qualify for hedge  accounting  treatment  and
eliminates the characterization  declines in fair value as impairments or direct
write-downs.  SFAS No.  156 is  effective  for an  entity's  first  fiscal  year
beginning  after  September  15,  2006.  The  adoption of this  statement is not
expected to have a material effect on our company's  future  reported  financial
position or results of operations.

                                      F-10

<PAGE>




                                 LIFE USA, INC.
                         (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended December, 31, 2006 and 2005

In June 2006, the FASB issued  Interpretation No. 48, Accounting for Uncertainty
in Income Taxes - An  Interpretation of FASB Statement No. 109, (FIN 48). FIN 48
clarifies  the  accounting  for  uncertainty  in income taxes  recognized  in an
enterprise's  financial  statements in accordance  with FASB  Statement No. 109,
Accounting for Income Taxes. FIN 48 also prescribes a recognition  threshold and
measurement attribute for the financial statement recognition and measurement of
a tax  position  taken or expected to be taken in a tax return that results in a
tax benefit.  Additionally,  FIN 48 provides guidance on de-recognition,  income
statement  classification  of  interest  and  penalties,  accounting  in interim
periods,  disclosure,  and transition.  This interpretation is effective for the
Company for its year ended  December 31, 2007. The Company has not yet evaluated
the  effect  that the  application  of FIN 48 may have,  if any,  on its  future
results of operations and financial condition.

In September 2006, the FASB issued SFAS No. 157, "Fair Value  Measurements." The
objective of SFAS 157 is to increase consistency and comparability in fair value
measurements and to expand disclosures about fair value  measurements.  SFAS 157
defines  fair  value,  establishes  a  framework  for  measuring  fair  value in
generally accepted  accounting  principles,  and expands  disclosures about fair
value measurements.  SFAS 157 applies under other accounting pronouncements that
require or permit  fair value  measurements  and does not  require  any new fair
value  measurements.  The provisions of SFAS No.157 are effective for fair value
measurements  made in fiscal  years  beginning  after  November  15,  2007.  The
adoption of this  statement  is not  expected  to have a material  effect on our
company's future reported financial position or results of operations.

On February 15, 2007,  the FASB issued SFAS No. 159,  "The Fair Value Option for
Financial  Assets and  Financial  Liabilities  - Including  an Amendment of FASB
Statement  No. 115." This standard  permits an entity to measure many  financial
instruments  and  certain  other  items at  estimated  fair  value.  Most of the
provisions  of SFAS No. 115  ("Accounting  for Certain  Investments  in Debt and
Equity   Securities)   applies   to  all   entities   that   own   trading   and
available-for-sale  securities.  The fair value  option  created by SFAS No. 159
permits  an entity  to  measure  eligible  items at fair  value as of  specified
election dates. Among others,  eligible items exclude (1) financial  instruments
classified  (partially  or in total) as  permanent  or  temporary  stockholders'
equity (such as a convertible  debt security  with a  non-contingent  beneficial
conversion  feature)  and (2)  investments  in  subsidiaries  and  interests  in
variable interests that must be consolidated.  A for-profit business entity will
be  required to report  unrealized  gains and losses on items for which the fair
value option has been elected in its statements of operations at each subsequent
reposting date. The fair value option (a) may generally be applied instrument by
instruments, (b) is irrevocable unless a new elections date occurs, and (c) must
be applied to the entire instrument and not to only a portion of the instrument.
SFAS No. 159 is  effective  as of the  beginning  of the first  fiscal year that
begins after  November 15, 2007.  The Company has not yet  evaluated  the effect
that the  application  of FIN 48 may have,  if any,  on its  future  results  of
operations and financial condition.

                                      F-11


<PAGE>






                                 LIFE USA, INC.
                         (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended December, 31, 2006 and 2005

NOTE 2 GOING CONCERN:

The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business.

The Company is a development  stage company and has earned limited  revenue from
operations.  The  Company  reported  a net loss of  $759,626  for the year ended
December 31, 2006 and an  accumulated  deficit during the  development  state of
$1,388,186. The Company's current liabilities exceed current assets by $901,474.
The  Company's  ability to continue  as a going  concern is  dependent  upon its
ability to develop  additional  sources of capital or locate a merger  candidate
and  ultimately,  achieve  profitable  operations.  The  accompanying  financial
statements do not include any adjustments  that might result from the outcome of
these  uncertainties.  Management  is  seeking  new  capital to  revitalize  the
Company.

NOTE 3  ACCOUNTS RECEIVABLE - OTHER:

Accounts  Receivable  - Other  consisted  of a double  payment  in the amount of
$8,581 to a vendor.

NOTE 4 INVENTORY:

The Company did not hold any  inventory at December 31, 2006.  The inventory had
been returned to various vendors and was impaired to $0.

Note 5 PROPERTY AND EQUIPMENT:

Property and equipment were comprised of the following at December 31, 2006:

                                         Cost    Acc. Depreciation     Net Book
                                         ----    -----------------     --------
         Furniture and fixtures     $   5,666         (5,666)                -
         Equipment - computers          3,000         (3,000)                -
                                        -----          -----              -----
         Total                      $   8,666         (8,666)                -
                                        =====          =====              =====

NOTE 6 ACCOUNTS PAYABLE:

Accounts payable includes trade payables and interest payable.

              Accounts payable     209,575
              Interest payable     121,734
                                 ---------
              Total              $ 331,309
                                 =========

                                      F-12

<PAGE>



                                 LIFE USA, INC.
                         (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended December, 31, 2006 and 2005

NOTE 7  NOTE PAYABLES:

        $  17,764    Promissory Note Payable issued to a financial institution
                     to fund the prepayment of insurance premium. Due upon
                     demand. Interest rate is 11%.

         $ 15,080    Note Payable issued to an investor. Due upon demand.
                     Interest rate is 8%.
         --------
         $ 32,844    Total notes payable outstanding on December 31, 2006.
         ========

NOTE 8 CONVERTIBLE NOTES PAYABLE:

Convertible notes payable as of December 31, 2006 consisted of the following:

         $ 50,000      Note payable 1, convertible into 151,515 shares,
                       due September 30, 2006,  incurring interest at 25%,
                       attached to the note are 151,515 warrants exercisable at
                       $0.625 per share. The note is secured by a subordinated
                       pledge of inventory and accounts receivable.

         $ 25,000      Note payable 2,  convertible  into 50,000  shares, due
                       September 7, 2006,  incurring  interest at 10%. Note
                       holder has verbally agreed to extend the note.

         $ 50,000      Note payable 3,  convertible  into 151,515 shares, due
                       September 30, 2006, incurring interest at 25%.
                       The note is  secured  by a  subordinated  pledge  of
                       Inventory and accounts receivable.

         $ 75,000      Note payable 4, convertible into 227,273 shares,
                       due September 30, 2006,  incurring interest at 25%,
                       attached to the note are 227,273 warrants exercisable at
                       $0.625 per share. The note is secured by a subordinated
                       pledge of inventory and accounts receivable.

         $ 20,000      Note payable 5, convertible into 40,000 shares, due
                       February 28, 2007,  incurring  interest  at 15%,
                       attached  to the note are  40,000  warrants
                       exercisable  at $0.65  per  share.

         $ 50,000      Note payable 6, convertible into 100,000 shares, due
                       February 28, 2007, incurring interest at 15%, attached
                       to the note are 100,000 warrants exercisable  at $0.65
                       per share.

                                      F-13

<PAGE>




                                 LIFE USA, INC.
                         (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended December, 31, 2006 and 2005

         $ 75,000      Note payable 7, convertible into 150,000 shares,
                       due May 27, 2006,  incurring interest at 10%, attached
                       to the note are 150,000 warrants exercisable at $0.625
                       per share.

         $ 50,000      Note payable 8, convertible into 100,000 shares, due
                       November 11, 2006, incurring interest at 10%, attached
                       to the note are 200,000 warrants exercisable  at
                       $0.625 per share.

         $ 50,000      Note payable 9, convertible into 100,000 shares, due
                       November 11, 2006, incurring interest at 10%, attached
                       to the note are 200,000 warrants exercisable  at
                       $0.625 per share.

         $  5,000      Note payable 10, convertible into 10,000 shares, due
                       November 11, 2006, incurring interest at 10%, attached
                       to the note are 20,000 warrants exercisable at $0.625
                       per share.

         $ 50,000      Note payable 11, convertible into 100,000 shares, due
                       December 7, 2006, incurring interest at 10%, attached
                       to the note are 200,000 warrants exercisable at $0.625
                       per share.

         $ 25,000      Note payable 12, convertible into 50,000 shares, due
                       February 20, 2007, incurring interest at 10%, attached
                       to the note are 100,000 warrants exercisable at $0.75
                       per share.

         $  5,000      Note payable 13, convertible into 10,000 shares, due
                       February 28, 2007, incurring interest at 10%, attached
                       to the note are 20,000 warrants exercisable at $0.75
                       per share.

         $ 50,000      Note payable 14, convertible into 125,000 shares, due
                       September 12, 2006, incurring interest at 25%, attached
                       to the note are 250,000 warrants exercisable at $0.75
                       per share. This note is secured by inventory and
                       accounts receivable.

         $ 50,000      Note payable 15, convertible into 125,000 shares, due
                       September 12, 2006, incurring interest at 25%, attached
                       to the note are 250,000 warrants exercisable at $0.75
                       per share. This note is secured by inventory and
                       accounts receivable.
         --------
         $630,000     Total Convertible notes payable. All these notes, with the
                      exception of notes 1, 3, 4, 14 and 15 are unsecured.
         ========

                                      F-14

<PAGE>





                                 LIFE USA, INC.
                         (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended December, 31, 2006 and 2005

NOTE 9 STOCKHOLDERS' DEFICIT:

Common Stock:

In July 2006,  the Company  issued  520,000  shares of its  restricted  stock to
certain consultants,  advisors and Board of Director members for their services.
On the date of the issuance and on the last day of the  quarter,  the  Company's
stock  traded at $0.30 per share.  The 520,000  shares were fully  expensed at a
total cost of $156,000.

Warrants:

During  the  years  ended  December  31,  2006  and  2005,  the  Company  issued
convertible   notes  payable  in  the  amount  of  $630,000  to  which  warrants
exercisable  for 1,908,790  shares of the Company's  common stock were attached.
The basic terms of the warrants are disclosed in Note 8.

The  attached  warrants,  if any,  give the note  holder  the right to  purchase
additional shares of common stock at a specified strike price.  Depending on the
terms of the  convertible  notes,  the note holder is granted for each converted
share one or two  warrants to purchase  one or two  additional  shares of common
stock at purchase  prices ranging from $0.625 to $0.75 per share for a period of
up to three years from the date of the  issuance of the  respective  convertible
note payable.

As of December 31, 2006, no warrants had been exercised.

A summary of warrant activity for 2006 is as follows:

<TABLE>
<CAPTION>
<S>                               <C>            <C>             <C>           <C>

                                                     Weighted                       Weighted
                                       Number        Average                        Average
                                       Of            Exercise     Warrants          Exercise
                                       Warrants      Price        Exercisable       Price
         ------------------------ -------------- -----------     -------------- -----------
         Outstanding
         December 31, 2005         1,288,788     $  0.60          1,288,788    $   0.60
             Granted                 620,000        0.75            620,000        0.75
             Expired                       0           0                  0           0
             Exercised                     0           0                  0           0
         ------------------------ -------------- -----------     -------------- -----------
         Outstanding
         December 31, 2006         1,908,788      $ 2.02          1,908,788    $   2.02
         ------------------------ -------------- -----------     -------------- -----------

</TABLE>

                                      F-15

<PAGE>






                                 LIFE USA, INC.
                         (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended December, 31, 2006 and 2005


At December 31, 2006 the range of warrant  prices for shares under  warrants and
the weighted-average remaining contractual life is as follows:
<TABLE>
<CAPTION>
<S>              <C>          <C>            <C>                 <C>          <C>

                            Warrants Outstanding                     Warrants Exercisable
                 -------------------------------------------     ------------------------
                                                   Weighted
                                   Weighted         Average                      Weighted
Range of              Number        Average       Remaining           Number      Average
Warrant                   of       Exercise     Contractual               of     Exercise
Exercise Price      Warrants          Price            Life         Warrants        Price
--------------   -----------  -------------  --------------      -----------  -----------
$0.625 to $0.75    1,908,788      $    2.02            3.14        1,908,788     $   2.02
                 ===========                                       =========
</TABLE>

Options:

During the year ended  December  31,  2006,  the  Company's  Board of  Directors
adopted a stock option plan. The Company is able to grant option exercisable for
up to 2,000,000 shares under the plan.  During the year ended December 31, 2006,
the  Company  granted  options  under  the stock  option  plan  exercisable  for
1,338,124  shares of the Company's  common  stock.  The options have an exercise
price of $0.50 per share and were fully vested upon issuance. The options have a
term of five years.

The  options  were  granted to  various  contractors  and to current  and former
directors and officers of the Company.

The granted stock options have been valued,  using a  Black-Scholes  model,  and
were fully  expensed.  During the year ended  December  31,  2006,  the  Company
incurred an expense of $96,847 in connection with the granting of the options.

A summary of the Option Plans at December 31, 2006 is as follows:

                                                                WEIGHTED AVERAGE
                                         SHARES                 EXERCISE PRICE

      Outstanding, Beginning of Year               0            $        -
      Granted                              1,338,124                  0.50
      Cancelled                                    -                     -
      Expired                                      -                     -
      Exercised                                    -                     -
                                           ---------            ----------
      Outstanding, End of Year             1,338,124            $     0.50
                                           =========            ==========

      Options Exercisable, End of Year     1,338,124            $     0.50
                                           =========            ==========

                                      F-16

<PAGE>


                                 LIFE USA, INC.
                         (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended December, 31, 2006 and 2005


The following table summarizes information about stock options outstanding as of
June 30, 2006:
<TABLE>
<CAPTION>
<S>                     <C>                          <C>              <C>             <C>                    <C>

                                   OPTIONS OUTSTANDING                               OPTIONS EXERCISABLE

                                      WEIGHTED-AVERAGE
RANGE OF                                  REMAINING                                                       WEIGHTED
EXERCISE             NUMBER OF           CONTRACTUAL       WEIGHTED-AVERAGE        NUMBER OF             AVERAGE
PRICES                OPTIONS           LIFE (YEARS)        EXERCISE PRICE          OPTIONS         EXERCISE PRICE
                      -------           ------------        --------------          -------         --------------

$0.50                   1,338,124                    5                $0.50           1,338,124               $0.50
                        ---------                    -                -----           ---------               -----
                        1,338,124                    5                $0.50           1,338,124               $0.50
                        =========                    =                =====           =========               =====
</TABLE>


NOTE 10  FEDERAL INCOME TAXES:

The  Financial  Accounting  Standards  Board  (FASB)  has  issued  Statement  of
Financial Accounting  Standards Number 109 ("SFAS 109"),  "Accounting for Income
Taxes",  which  requires  a change  from the  deferred  method  to the asset and
liability  method of accounting for income taxes.  Under the asset and liability
method,  deferred  income  taxes  are  recognized  for the tax  consequences  of
"temporary  differences" by applying  enacted  statutory tax rates applicable to
future years to differences between the financial statement carrying amounts and
the tax basis of existing assets and liabilities.

The Company has deferred  income tax assets,  which have been fully  reserved as
follows:

         Deferred tax assets
            Net operating loss carryforwards                  $1,485,033
            Valuation allowance for deferred tax assets       (1,485,033)
                                                              ----------
         Net deferred tax assets                              $        -
                                                              ==========

At December  31,  2006,  the Company had net  operating  loss  carryforwards  of
$1,485,033 for federal income tax purposes. These carryforwards, if not utilized
to offset taxable income will expire at the end of the December 31, 2026.



                                      F-17

<PAGE>


                                 LIFE USA, INC.
                         (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                 For the Years Ended December, 31, 2006 and 2005

NOTE 11 - COMMITMENTS AND CONTINGENCIES:

Operating Rental Leases

The Company  leases its office in Boulder,  Colorado,  under a rental  operating
lease with monthly  payments of $1,665 on a 13 month lease,  of which 1 month is
free, and which expired on January 15, 2007. The effective monthly lease rate is
$1,537.  The Company also had an ongoing lease obligation until May 31, 2006, in
the amount of $535 per month for its previous  office  location.  This secondary
lease  obligation  was fully  satisfied  when the office space was sub-leased in
March 2006.

Litigation

The Company may be involved from time to time in various claims,  lawsuits,  and
disputes with third parties,  action involving  allegations or discrimination or
breach of contract actions  incidental in the normal operations of the business.
The Company is currently not involved in any such  litigation  which  management
believes could have a material adverse effect on its financial position.

NOTE 12 SUBSEQUENT EVENT:

In  January  2007,  the  Company  ceased  the  operations  of  its  wholly-owned
subsidiary, Nuero.

In February  2007, the Company  defaulted on $50,000 in  convertible  promissory
notes. See Note 8.

                                      F-18

<PAGE>
                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                 LIFE USA, INC.


                                               Date: April 16, 2007

                                               /s/Wesley F. Whiting
                                               - ------------------
                                             Wesley F. Whiting, Acting

                                             President, CEO and Acting CFO


In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.


Date: April 16, 2007

/s/Wesley F. Whiting
- ------------------
Wesley F. Whiting, Director

                                      19